Netflix Stock Attractive At All-Time Highs For Analyst: 'Virtuous Circle Of Strong Subscriber Growth, More Revenue, And Growing Profit'

A Netflix Inc NFLX analyst says investors are focused on advertising growth opportunities and price hikes after the recent fourth-quarter financials that saw record membership growth.

The Netflix Analyst: JPMorgan analyst Doug Anmuth reiterated an Overweight rating on Netflix with a $1,150 price target.

The Analyst Takeaways: Netflix's fourth-quarter financial results showed confidence in 2025 revenue growth and a strong content slate, Anmuth said in a new investor note.

"We expect NFLX's 2025 revenue growth to be driven by strong engagement & organic sub growth, along with ARM growth through recent price increases," Anmuth said.

The analyst highlights strong engagement of Netflix content with around 200 billion hours of content viewed in 2024 or around two hours per member per day.

Price hikes are likely to be a key catalyst for the company going forward, Anmuth added.

"We estimate the US & UK price hikes will increase annualized revenue by ~$2B in the US & ~$370M in the UK, which gives us increased confidence in NFLX's revenue guidance, with room for potential upside."

The analyst predicts there will not be much pushback on the price increases with a strong content slate and Google Trends data showing search interest for "Cancel Netflix" has normalized.

Anmuth said investors are shifting their focus to Netflix's advertising business, which could be related to the successful rollout of the first-party platform in Canada in the fourth quarter. The platform will be rolled out to the United States in April.

The analyst expects Netflix to balance its content spending with its goal of margin expansion.

"We believe the backdrop for content acquisition remains favorable, & we expect a healthy mix of original/licensed content into 2025."

Anmuth sees Netflix pushing deeper into live sports over time.

The analyst highlights a strong first-quarter content slate of series and movies along with weekly WWE Raw content that debuted on Jan. 6, "which we believe should drive weekly appointment viewing."

"We believe NFLX is a key beneficiary and driver of the ongoing disruption of linear TV, with Netflix's content performing well globally and driving a virtuous circle of strong subscriber growth, more revenue, and growing profit."

NFLX Price Action: Netflix stock is up 0.7% to $1,034.92 on Thursday versus a 52-week trading range of $542.01 to $1,039.24, hitting new all-time highs during Thursday's morning session. Netflix stock is up 87% over the past year.

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